Questcor Pharmaceuticals (NASDAQ:QCOR) is executing a strategy that Wall Street has rewarded time after time. Questcor is giving us every indication that it's a great long-term investment and is superior to its peers.

A lucrative strategy
In the first two quarters of 2013, Questcor's revenue has grown about 60% year-over-year and its stock has soared 115%. The backbone to these gains are Acthar Gel , a product used to treat 19 indications, including infantile spasms, multiple sclerosis, nephrotic syndrome and now rheumatology indications such as psoriatic arthritis and rheumatoid arthritis.

These new indications are helping to drive growth, as Questcor had its greatest launch in Acthar's history with rheumatology; the company shipped 300 of its 7,050 Acthar vials in the last quarter. Moreover, Questcor is piling up indications and continues to test Acthar in clinical studies.

The company is expanding its studies to grow its market share in lupus, Lou Gehrig's disease, and in treating countless other diseases. Essentially, Questor is a biotechnology company, but its goals center around Acthar, and developing this product to treat as many indications as possible.

Far superior upside
What's exciting about Questcor as an investment opportunity is that shares appropriately reflect the growth and risks associated with Acthar. To explain, consider the valuation and performance of companies with similar objectives such as Alexion (NASDAQ:ALXN) and Aegerion (NASDAQ:AEGR).

Alexion's Soliris is approved to treat two rare genetic and blood disorders. If all goes according to plan, Soliris will expand to treat seven total indications if proven successful in clinical trials. Therefore, it's possible that Soliris reaches peak sales estimates of $4 billion, but as of now, annual sales are $1.32 billion. And much of Alexion's valuation rests on the company's ability to expand and successfully market Soliris. Currently trading with a market cap of $21 billion, there is essentially no room for operational error, creating more downside than upside.

Aegerion is another company with high expectations. Its drug Juxtapid treats a rare cholesterol disease and already has 215 patients on the drug. As a result, Aegerion's valuation has increased 485% in the last year, creating a market cap of $2.4 billion, as expectations rise. The problem is that the FDA estimates only one in one million occurrences of the disease, leaving some to wonder how much upside really exists for Juxtapid. With a $2.4 billion valuation, there is very little room for operational error. Thus, Aegerion must expand into other regions and increase Juxtapid's indications in order to maintain momentum.

In the case of Questcor, it has revenue of $620 million over the last 12 months and a market capitalization of $3.45 billion. Questcor trades with a price/sales of just five versus 15.5 for Alexion. In fact, Questcor's P/E ratio is the same as Alexion's price to sales, showing significant value in shares of Questcor.

Furthermore, Questcor is expected to see continued growth; it trades with a PEG ratio of 0.43, which is a metric used to compare valuation to a company's five year projected EPS growth. In theory, a 1.0 equals fair value and anything below 1.0 signals that a company is undervalued relative to projected growth. In comparison, Alexion has a PEG ratio of 1.38.

Final thoughts
Simply put, Questcor looks very cheap. The company continues to grow and prove naysayers wrong regarding Acthar. Moreover, Questcor has given shareholders the ultimate sign of confidence with its 20% dividend hike on Thursday, now paying a forward yield of 2.2%. In comparison to Alexion and Aegerion, or other biotechs such as Celgene or Regeneron, Questcor is the only in this class that pays a dividend, further proving to investors that management is sure of its own product.

Brian Nichols owns Questcor. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.